Stock Market Outlook: Nifty at Risk of Slipping Below 24,500? RBI Rate Decision, Trump’s Tariff Key Drivers!

Indian stock markets are expected to open on a cautious note on Tuesday, August 6, as investors brace for dual triggers-the Reserve Bank of India's Monetary Policy Committee (MPC) announcement and renewed geopolitical tensions triggered by U.S. President Donald Trump's threat to impose higher tariffs on India.

Stock Market Outlook August 6: What Will Drive Market Sentiments Today?

While the RBI is widely expected to hold the repo rate steady, the tone of the policy commentary could play a crucial role in shaping market sentiment. Simultaneously, Trump's statement regarding a sharp increase in tariffs over India's continued imports of Russian oil has created fresh concerns for investors.

RBI Monetary Policy Decision: Investor focus will remain sharply on the RBI's monetary policy decision. The central bank's commentary on inflation, growth, and liquidity outlook could drive the next market move. Additionally, foreign portfolio outflows have weighed heavily on sentiment in recent sessions and will remain a key factor.

On August 5, benchmark indices ended in the red, weighed down by global uncertainties and persistent foreign investor selling. The BSE Sensex dropped 308.47 points, or 0.38%, to close at 80,710.25, while the NSE Nifty 50 fell 66.20 points, or 0.27%, ending at 24,649.55. Key laggards included Reliance Industries, Adani Ports, Infosys, ICICI Bank, and BEL, all of which declined between 0.7% and 2.4%.

Tariff Tensions Weigh on Sentiment

President Trump's latest remarks added further pressure to global risk sentiment. He warned that the U.S. will raise tariffs on imports from India "very substantially" within 24 hours if India does not reduce its oil imports from Russia. This sharp tone from Washington has injected fresh uncertainty into global trade dynamics, just as Indian markets prepare for the RBI's policy update.

Sensex, Nifty Prediction Today

Adding to the caution, Gift Nifty was trading around 24,685 ahead of the opening bell, indicating a mildly negative start as it sits nearly 23 points below the previous Nifty futures close.

From a technical perspective, the Nifty 50 index formed a bearish candle with a lower shadow on daily charts, suggesting pressure at higher levels and a possible pause in the recent rally.

According to derivatives data, the maximum Call open interest is placed at 25,000, followed by 24,800 and 24,700 strikes-levels that may act as near-term resistance. On the Put side, 24,000 remains the strongest support, followed by 24,500 and 24,600.

Put writing was most aggressive at the 24,500 strike, with 11.99 lakh contracts added, indicating traders expect some support near these levels. Meanwhile, Call writing was prominent at 24,600, suggesting a likely cap on upside movement unless there's a major trigger.

Technical analysts remain cautious. Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher stated, "The crucial support zone of 24,500 level needs to be sustained to maintain the overall trend intact, failing which one can expect further intensified selling pressure, with 24,000 positioned as the next major support."

Key Technical Levels for Nifty and Sensex Today

For the Nifty 50 index, key support levels are placed at 24,500 and 24,000, which traders should watch closely in case of further market weakness. A breakdown below these zones could lead to increased selling pressure and a potential test of lower levels.

On the upside, 24,700 and 25,000 remain important resistance levels. The index will need to decisively break above these barriers to resume a bullish trend and sustain upward momentum.

As for the Sensex, the index is likely to trade within a broad range of 80,000 to 81,200 for the day. A move outside of this band, particularly with strong volumes, could indicate the next directional shift for the market.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.